Struggling to Save? You Might Not Be Alone SHP Financial

The current rate of monthly savings across America is currently at 4.6%. This means that most Americans are saving about 4.6% of their monthly income. This number is unusual as the average amount is almost double that number at 8%. Also, in June, this number dipped to a 15-year low of 2.7%.[1] Economists are noting these numbers because it means that Americans are likely having difficulty saving in the current economic conditions.[2]

While most people saved more money than they would have normally during the pandemic, there are some concerns that the extra money people had saved will now disappear.[3] If a lot of your money is in cash, inflation can still find a way into your wallet. Remember, because during inflation, the prices of things increase faster than normal, your money may not stretch as far as it used to, essentially making it worth less. Crucially, this can also make it difficult to save as much as you would like to. For much of America, that’s exactly the case—that 4.6% savings rate, down from 8%, is likely because people’s money isn’t stretching as far as it used to, and they are dipping into their reserves to maintain their lifestyle or cover their costs of living.

When it comes to retirement planning, it’s important to take a long-term view when it comes to issues of saving. While everyone’s financial situation is different, it is generally a costly decision to use your retirement funds as backup savings accounts before you retire. The issue with withdrawing from your retirement accounts if you are not yet retired is that they will be subject to many additional fees and taxes. If you haven’t reached the age of 59.5, you’ll face a 10% tax penalty for early withdrawal of a retirement account. Also, withdrawing from a traditional retirement account can also raise your income bracket and raise your income taxes for the year as well.[4] It is important to keep these fees and taxes in mind when you’re deciding how to handle changes to your financial situation.

If you are looking for help with your finances and are trying to find ways of protecting yourself and your investments from the creep of inflation, our professional financial advisors can provide you with advice and strategies to make sure that you know exactly how your decisions will affect your accounts. Reach out to us today for a complimentary review of your finances.


The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by tMedia, LLC, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. tMedia, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
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